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Bloomberg: Exxon Overtakes PetroChina as World’s Biggest Company (Update2)

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A customer looks over a gasoline pump at an Exxon station in Columbus, Ohio, Sept. 13, 2007. Photographer: Gary Gardiner/Bloomberg News

By Joe Carroll

March 26 (Bloomberg) — Exxon Mobil Corp. regained the mantle as the world’s biggest company by market value, overtaking PetroChina Co., whose shares have slumped 58 percent since its listing in Shanghai.

PetroChina dropped for a fifth day, falling 2.5 percent to 18.54 yuan by the close, reducing its market capitalization to $453.1 billion. The Chinese company’s Hong Kong-traded stock dropped 1.3 percent to HK$9.69. Exxon Mobil was valued at $455.8 billion today after rising 13 percent in the past year on record energy prices.

PetroChina, an 8-year-old creation of the People’s Republic of China, in November overtook Exxon Mobil, which traces it roots to the 1880s and John D. Rockefeller’s Standard Oil Trust, when the Chinese company’s market value surged to $1 trillion. Since then, PetroChina lost more than half its worth as $100-a- barrel oil and rising drilling costs squeezed profits.

“PetroChina just doesn’t show up in terms of reaping any kind of excess reward for the sort of risk involved in investing in them,” said Phillip Mitteldorf, a portfolio manager who helps oversee $5 billion at Navellier & Associates Inc. in Reno, Nevada. “We won’t even look at them.”

Exxon Mobil shares traded in Germany increased 39 cents to $85.59 at 12:02 p.m. local time.

Irving, Texas-based Exxon Mobil raked in $40.6 billion in profit last year, the biggest ever for a U.S. company. Exxon Mobil’s 2007 sales of $358.6 billion exceeded the gross national products of every nation on Earth except the U.S., Japan, Germany and 17 others.

5 Months at the Top

PetroChina’s five-month reign as the world’s most-valuable corporation began after its stock price tripled in the first day of Shanghai trading after an offering of 4 billion shares. Exxon Mobil declined about 3 percent since then.

The value of all Chinese stocks fell 25 percent this year to $3.36 trillion after more than tripling in 2007. The Standard & Poor’s 500 Index, by comparison, this year has dropped 7.9 percent.

Investors who bought PetroChina stock on the expectation that rising energy demand in China’s expanding economy would boost the company’s refining profit have been disappointed, said James Halloran, an analyst at Cleveland-based National City Private Client Group, which manages $35 billion.

PetroChina’s refineries lost $54 million a week last year because of government price controls that prevented the company from passing higher oil costs on to transport firms and other fuel users. The shares dropped to a 10-month low in Hong Kong when those results were announced on March 20.

Drilling Costs

Exxon Mobil’s refining business, the world’s largest, had profit of $184 million a week in 2007. The company sells 80 percent of the fuel it produces in the Americas, Europe and other markets where price controls are less restrictive or non- existent.

“It’s government control versus free enterprise and there’s no comparison,” said Jack Aydin, a senior managing director and energy analyst at Keybanc Capital Markets in New York.

PetroChina has also been forced to spend more for drilling rigs, pipes and valves as oil companies around the world compete for limited supplies of equipment needed to find and develop petroleum deposits, said David Foley of Grove Creek Asset Management.

PetroChina’s costs for drilling wells and building pipelines jumped 30 percent in 2007 to about $36 billion, compared with a 3.1 percent drop in such expenses at Exxon Mobil.

Exxon Mobil has a 29 percent return on capital employed, the highest among the world’s biggest 10 oil companies by sales. PetroChina is seventh with a 21 percent return, behind Total SA, Royal Dutch Shell Plc, Chevron Corp., BP Plc and China Petroleum and Chemical Corp., according to data compiled by Bloomberg.

To contact the reporter on this story: Joe Carroll in Chicago at [email protected].

Last Updated: March 26, 2008 07:09 EDT and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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